Lumen Technologies, Inc. LUMN is scheduled to report its second-quarter 2026 results on Aug. 4, after market close.
The Zacks Consensus Estimate for the bottom line in the to-be-reported quarter is set at a loss of 15 cents compared with a loss of 3 cents reported in the prior-year quarter. The estimate has been unchanged in the past 60 days. The consensus estimate for total revenues is pinned at $2.75 billion, implying a 11.1% year-over-year decline.
Lumen’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with the average surprise being negative 87.7%.
Price Performance
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Its shares have gained 38.8% in the past year against a 5.5% decline for the Diversified Communication Services industry.
What Our Model Predicts for LUMN’s Q2
Our proven model does not conclusively predict an earnings beat for Lumen this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
LUMN has an Earnings ESP of 0.00% and a Zacks Rank #3.
Factors at Play Ahead of LUMN’s Q2 Results
Investors' focus will be mainly on the company’s multiyear transformation strategy, traction in digital services and updates for its legacy business. Lumen has been repositioning itself as an enterprise-focused infrastructure provider, supported by significant balance sheet improvement and strategic realignment.
In the first quarter, revenues decreased 10%, reflecting structural declines in legacy services. But strategic revenues emerged as a key bright spot with revenues up 9.4% year over year to $1.246 billion.
Lumen’s performance in the second quarter is likely to have been cushioned by increasing opportunities arising from the proliferation of AI, which has been fueling demand for its Private Connectivity Fabric (“PCF”) solutions. At the end of the first quarter, LUMN had $13 billion in PCF deals. Lumen recognized revenues of $78 million for the first quarter associated with the PCF deals. Management noted that about $32 million of that figure reflected a delivery milestone payment that is not expected to repeat in the second quarter.
Continued adoption of Network-as-a-Service (NaaS) offerings is likely to have remained a key growth driver, with the company reporting strong customer additions, port adoption and increased service count in the prior quarter. At the quarter-end, Lumen had 2,500 NaaS customers, with more than 30% repeat purchasers. On the last earnings call, management added that, among the existing customers, more than 60% of first-time adopters expanded their footprint rather than simply migrating legacy services.
Lumen has been building a connected ecosystem that helps buyers purchase, provision and manage their network services, while also offering cloud solutions in digital marketplaces. The connected ecosystem is likely to have aided in scaling solutions to new clients faster.
Lumen Technologies, Inc. Price and Consensus
Lumen Technologies, Inc. price-consensus-chart | Lumen Technologies, Inc. Quote
Lumen continues to progress with its turnaround and is striving to boost operational efficiency. The company is anticipating $1 billion in cost savings by the end of 2027 through planned infrastructure simplification across the network, product portfolio and IT. It is also leveraging AI tech to drive intelligence and automation. The ERP program has progressed to Phase 2 with a unified ledger, positioning Lumen to drop legacy systems and drive efficiencies over time.
Investors will also focus on financial profile improvements. The sale of Mass Markets' fiber-to-the-home business (including Quantum Fiber, across 11 states) to AT&T for $5.75 billion in cash acted as a catalyst. Post the completion of the transaction, management used cash on hand and $4.8 billion in net proceeds to fully retire super-priority bonds.
On the last call, management noted that the leverage post-AT&T deal is now below 4x and annual interest expense has been reduced nearly $300 million. Long-term debt as of March 31, 2026, stood at $12.9 billion, down from $17.5 billion as of Dec. 31, 2025.
Nonetheless, despite deleveraging, the debt is still massive. Further, as the company shifts toward newer growth products like fiber and cloud-based offerings, the secular headwinds in the legacy business will continue to prove a strain on the top-line expansion, at least in the near term.
Higher costs associated with PCF deals, macro volatility and stiff competition in the AI space remain additional concerns.
Recent Key Developments
On July 13, 2026, Lumen launched Defender Advanced Managed Detection and Response for Palo Alto Networks Cortex XSIAM, combining its managed detection, response services and Black Lotus Labs threat intelligence with Cortex XSIAM's AI-driven SOC platform. The solution helps enterprises improve threat detection, reduce alert fatigue and respond faster to increasingly sophisticated cyberattacks.
On July 7, 2026, Lumen completed its acquisition of Alkira. Alkira is a “cloud-native, carrier-agnostic” networking platform, which will extend Lumen’s programmable networking footprint into faster-growing east-west connectivity, including cloud-to-cloud and data center-interconnect. Management positioned Alkira as a control-plane software for cloud connectivity.
Stocks With the Favorable Combination
Here are three stocks you may want to consider, as our model shows that these have the right elements to post an earnings beat in this reporting cycle.
Arista Networks ANET currently has an Earnings ESP of +3.08% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
ANET is scheduled to report quarterly earnings on Aug. 4. The Zacks Consensus Estimate for ANET’s to-be-reported quarter’s earnings and revenues is pegged at 89 cents per share and $2.83 billion, respectively. Shares of ANET have gained 39% in the past year.
Caterpillar CAT presently has an Earnings ESP of +4.96% and a Zacks Rank #2. CAT is scheduled to report quarterly numbers on Aug. 4. The Zacks Consensus Estimate for Caterpillar’s to-be-reported quarter’s earnings and revenues is pegged at $6.25 per share and $19.31 billion, respectively. Shares of CAT have risen 93.7% in the past year.
Advanced Micro Devices, Inc. AMD has an Earnings ESP of +1.56% and a Zacks Rank #2 at present. AMD is scheduled to report quarterly figures on Aug. 4. The Zacks Consensus Estimate for AMD’s to-be-reported quarter’s earnings and revenues is pegged at $1.61 per share and $11.32 billion, respectively. Shares of AMD have skyrocketed 153.3% in the past year.
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This article originally published on Zacks Investment Research (zacks.com).